WEF’s “Blockchain Bill of Rights”: Is Crypto Regulation Imperative?

The Blockchain and Distributed Ledger Technology team at the World Economic Forum (WEF) announced that it is creating a ‘Blockchain Bill of Rights: Design Principles for a Decentralized Future,’ to be presented at the international organization’s Annual Meeting in Switzerland from January 21–24.

The document aims to provide some alignment amongst the central players working on blockchain and thus establish bare minimum standards in the design, strategy, development, and implementation of the technology. Its primary goal will be to furnish a theory of how users of the blockchain technology must be protected in the following areas:

• The right of ownership over their data.
• The right to privacy and security in terms of the protection of their data.
• The right to transparency and accessibility of information about the system that consumers use.
• The right to understand remedies available for accountability in instances of fraud.

The Bill will be produced with inputs from the foremost leaders in the space, including business leaders from Consensys, Deloitte, CoinShares UK, the Ethereum Foundation, Accenture, ING Group, Bitfury, and ZCash as well as notable establishments such as the Blockchain Research Institute, MIT, Imperial College London, and the United Nations World Food Program.

Blockchain: From a Buzzword to a Business

As blockchain continues to gain significant global traction, interest in the technology has moved beyond mere hype. Private organizations, as well as governments, are exploring its applications across industries which include banking, agriculture, energy, automotive and retail. Leaders in the business and public sectors are beginning to see blockchain as the perfect remedy to resolve specific problems in these areas.

According to a projection by International Data Corporation (IDC), blockchain spending will grow vigorously over the course of the next few years with total spending of approximately $12.4 billion in 2022.

Widespread Scams with Blockchain Growth

As blockchain and cryptocurrency become the future of finance, they are bound to affect an increasing number of people. This makes it vital that as we go forward, blockchain applications are designed keeping in mind the rights of the users. The new surge of development in the field of blockchain offers a unique opportunity to correct existing bugs. This helps create a technology that will leave no room for misuse or fraud. However, this hasn’t been the case so far. The crypto space has witnessed innumerable Ponzi schemes; cryptocurrencies worth millions of dollars have been scammed out of massive sums of real money. In fact, cryptocurrency-related crimes reportedly hit US$1.7 billion in 2018.

Moreover, studies show that growth in the crypto market has been littered with fraudulent ICOs. Almost 80 percent of total ICOs conducted in 2017 were found to be scams. Furthermore, a majority of ICO projects were found to fail within four months of their token sales.

Need for Urgent Regulation

The recurrent instances of such malicious activities heighten the need for appropriate crypto regulation. If blockchain and cryptocurrency are looking to truly scale to the next stage, it is essential that the technology, as well as the regulation surrounding it, address fundamental issues like the rights of users.

Moving forward, blockchain must be designed carefully so as to ensure that susceptible populations are not left out or exploited and its fundamental premise of decentralization is consistently maintained. The World Economic Forum’s Blockchain Bill can provide the first steps to ensuring these principles.

The introduction of the World Economic Forum’s Bill will provide a direly needed platform for an open discussion about how blockchain technology and cryptocurrency should scale in the next decade. Protection of users can only be achieved through design choices at the individual level as technology develops, however, a set of widely agreed upon philosophies can have an extensive impact by laying out the community’s dedication and commitment to user rights.